All Forum Posts by: Michael Watford

Quote from @David Chappell:

Quote from @Michael Watford:

Quote from @David Chappell:

I would check and make sure you arent comparing property taxes for owner occupied properties vs investment properties. For example, in Alabama where I invest, non-homestead properties are sometimes double what owner occupied ones pay. Using the rates from the link below, it estimated non owner occupied taxes to be $3352...so $4200 is a little high but not too far off. I estimated the taxes incorrectly on my first property, I ran the number as an owner occupied but when I lost that exemption, the taxes went up 2x and wiped out a majority of my cashflow but rents are slowly rising and Im catching back up.

https://www.roomsrealty.com/mi...

 These are great points & really appreciate the advice here.

I actually found a place that sold for 160k in 2020 and their taxes were just under 5k last year.

Yikes! Not giving me a good feeling for my future if I go through with this deal.

I hope you get back into the + on your investment here soon!

 Thanks! Its tougher to find cashflowing deals in today's market...if a few thousand +/- on the tax bill puts you into the negative then the margins may be a little too tight for it to make sense. 

 Definitely was a great learning experience for us. We passed on the property this morning.

I appreciate your guidance!

Quote from @Travis Biziorek:

Michael, I lived in Metro Detroit from 2017-2022 (August) and now live in California. 

I have 12-doors in Detroit and know the market extremely well. I also understand the Warren market. Happy to take a look if you want another set of eyes on the deal.

 Hey Travis,

Thank you so much for the offer, I just shot you a connection request with some information on the deal in it.

Quote from @Adam Frocione:

Any sense for their reassessment schedule and how close they are to a reassessment?

 It should be locked in already for this year, but my worry is come next year I dive into negatives.

Quote from @David Chappell:

I would check and make sure you arent comparing property taxes for owner occupied properties vs investment properties. For example, in Alabama where I invest, non-homestead properties are sometimes double what owner occupied ones pay. Using the rates from the link below, it estimated non owner occupied taxes to be $3352...so $4200 is a little high but not too far off. I estimated the taxes incorrectly on my first property, I ran the number as an owner occupied but when I lost that exemption, the taxes went up 2x and wiped out a majority of my cashflow but rents are slowly rising and Im catching back up.

https://www.roomsrealty.com/mi...

 These are great points & really appreciate the advice here.

I actually found a place that sold for 160k in 2020 and their taxes were just under 5k last year.

Yikes! Not giving me a good feeling for my future if I go through with this deal.

I hope you get back into the + on your investment here soon!

Hey BP,

I am looking at purchasing a home in Warren, MI. The numbers all make sense but when I call the city/county they are estimating the taxes to be $4200 next year on a 117k sale price.

If that turns out to be true the cash flow goes negative.

Looking at the area I can see other homes that sold in 2021 for 150k+ that only paid 1-2k in taxes in 2022.

I can't find any homes in the area paying 4k+ taxes.

I am very confused on how to properly estimate property taxes.

Has anyone else ran into something similar? Got any advice

Thanks in advance!

Quote from @Andrew Syrios:

Quote from @Michael Watford:

Quote from @Andrew Syrios:

That sounds like a really good rent/cost in this market. But I would make sure to go out and look at the property, don't just rely on someone else's opinion. Also study Warren, MI. Is it of decent size with at least OK schools and not out of control crime? Is the city dying or at least relatively stable population wise? I wrote a piece on out of state investing I'd recommend that you might find helpful as well: https://www.biggerpockets.com/...

Hey Andrew,

Thank you for your response and the link. I gave it a read also.

What I can tell from looking online:

- It is on the border of where crime gets bad, if it were any further south I'd skip it.
- Schools do not seem the best
- Population is maintaining and property values are appreciating

I fully plan on making a flight out there in the next week to scope it out for myself.
I am hoping once I am there in person I can get a better feel + chat with some locals.

 That sounds a bit on the edge. My rule of thumb when investing out of state is to invest in one area better than the lowest you would accept where you are. For example, if you would only take C+ properties in your location, go for B- or better. The one you describe doesn't sound terrible, but it sounds very marginal. I would be hesitant as an out-of-stater. (Although admittedly I'm always hesistant as an out-of-stater)

Thank you for the feedback here Andrew. Definitely given me some things to think about.
I hope you have a great day! 

Quote from @Rose Bush:

The midwest is a great place for cash-flow. I have a better numbers for a property I own. I need to sell unfortunately to move my investment elsewhere. Here are the details, please email me if you need more info.

Affordable rental property in the fast growing areas of Shaker Heights in North East Ohio.

Condo located in the fast growing area of Shaker Heights Van Aken District.

Condo has been rented for the last four years. After the last lease ended, the kitchen and bathroom are fully remodeled.

Asking price - 90K
1150 sqft. 2bed 2bath
Rent: $1600 - $1800 per month
Expenses: $1255 annual property tax, $545 monthly maintenance fee (includes trash, snow removal and covered parking)
Cashflow: $12000 - $15000 per year, after all expenses deducted!

Ready to rent.
https://www.zillow.com/homes/1...

Hey Rose,

 I appreciate the offer but we are currently not interested in Condos/Apartments.

Goodluck with your sale & new investments!

Quote from @Andrew Syrios:

That sounds like a really good rent/cost in this market. But I would make sure to go out and look at the property, don't just rely on someone else's opinion. Also study Warren, MI. Is it of decent size with at least OK schools and not out of control crime? Is the city dying or at least relatively stable population wise? I wrote a piece on out of state investing I'd recommend that you might find helpful as well: https://www.biggerpockets.com/...

Hey Andrew,

Thank you for your response and the link. I gave it a read also.

What I can tell from looking online:

- It is on the border of where crime gets bad, if it were any further south I'd skip it.
- Schools do not seem the best
- Population is maintaining and property values are appreciating

I fully plan on making a flight out there in the next week to scope it out for myself.
I am hoping once I am there in person I can get a better feel + chat with some locals.

Hey Joe,

I didn't post all of the math here but I did run the #s and looks like I should expect around $200 in cash flow & 11% CoCROI.

Near my home in FL the best thing I have been able to find so far is a property around 150k with $1400 expected for rent (but wouldn't need a PM).

From another post on BP and some research looks like you need a real estate brokers license in MI, but I don't have the experience required to get it. So a PM would be needed. I thought PM averaged around 8-12%.

https://www.jmzmanagement.com/...

Hello wonderful people of BP!

I am looking to get into the RP game and originally planned to purchase something in the Tampa, FL area later this year, however an opportunity has presented itself for an out of state investment.

I am hoping to get some advice from anyone that has done this in the past.

We've been offered a property in Warren, MI. The deal comes in at 117k but comes with a renter paying $1400/month.

It has a property manager already at 7% and from the looks of it a PM is required in MI for out of state investors.

I've been unable to find any type of deal around Tampa with these margins on property cost vs rent.

We plan to: Fly up and see the property, interview the PM, get an assessment, and have the tenant fill out an estoppel agreement.

I plan to use a CPA for tax purposes. I also have a lawyer on retainer already to review all contracts.

I would appreciate any input/advice you could offer.